Inside Traders 'Nobu' And 'Fruit' Made Millions, U.K. Court Toldby
Group made 7.4 million pound profit, U.K. prosecutors say
Lamborghini55 was password for encrypted memory stick
Encrypted storage devices, pay-as-you-go mobile phones and nicknames such as “Nobu,” “Fatty" and “Fruit" were used in a conspiracy to commit insider trading by five men working at various firms including Deutsche Bank AG, prosecutors said at the opening of one of the U.K.’s biggest insider dealing trials.
The men used "elaborate, carefully planned and executed strategies” designed to keep their activities secret from authorities, prosecutor Mark Ellison told the court Thursday, acting for the U.K Financial Conduct Authority. Ellison said the evidence will focus on six acts of insider dealing that made profit of 7.4 million pounds ($10.7 million) for the defendants.
Martyn Dodgson, a 44-year-old former managing director at Deutsche Bank, Andrew "Grant" Harrison, who worked at stockbroker Panmure Gordon & Co at the time of the alleged behavior, Benjamin Anderson, a 71-year-old private day trader, former Aria Capital Ltd. director Iraj Parvizi, who wore a black jumper in court with the words "Live to Race", and accountant Andrew Hind, 55, are accused of conspiring to trade securities with inside information between November 2006 and March 2010. Anderson wasn’t in court Thursday due to illness, the jury were told at the trial, which is being presided over by Judge Jeffrey Pegden.
Ellison described how the group facilitated the insider trading using offshore accounts and encrypted portable hard drives, found by the regulator when a number of the men were arrested in 2010.
Dodgson had a key for a locked metal box at his home in Hampstead when he was arrested. Inside the box was an encrypted memory stick that the FCA managed to access using the password "Lamborghini55." The device contained several spreadsheets setting out Dodgson’s financial assets and plans, which included a goal to reach 5 million pounds in net assets.
The FCA also discovered Hind had purchased six of the encrypted memory sticks in 2007. Three were found in a tin in a wall safe but the FCA wasn’t able to break the passwords --which self-delete after a certain number of attempts. The FCA found evidence that shortly after his arrest in 2010, Hind sought technical support to find out if logs were kept of the devices being used.
Ellison told the jury how Dodgson and Harrison had access to price-sensitive information from their jobs in the corporate broking departments of big firms. The prosecution alleges they used Dodgson’s friend Hind as a "middleman" who would pass information to "prolific traders" Anderson and Parvizi to trade on. Ellison showed spreadsheets found in Hind’s house with what the prosecution say are the profit and losses recorded from the trades using anonymous codes for those involved. Other documents presented to the jury showed Hind was known as “Nobu,” Parvizi “Fatty” and Dodgson was called “Fruit.”
As part of their investigation, the FCA also bugged Anderson’s office and recorded a conversation between him and Parvizi. The pair discussed a planned meeting where Hind would give Parvizi about 700,000 pounds to share with Anderson. In that meeting, Anderson told Parvizi he would deny knowing the identity of “Nobu” if he were questioned. This was evidence he knew they needed to hide what they were doing from the authorities, the prosecution said.